Posts tagged norwich union

We’ve mentioned this before, but a recent article in the Independent on Sunday has nicely highlighted how the practice of getting insurance under a parent’s (or other relative’s) name, known in our industry as ‘fronting’ could leave you severely out of pocket.

Representatives from Zurich, More Than (Royal Sun Alliance’s consumer brand) and Norwich Union (currently being rebranded to Aviva) were wheeled out warning that fronting is a bad idea for all concerned.

Keith Lewis from Zurich said:

“Not only can it lead to a claim being refused but also both the young person and their parents can be charged with insurance fraud.”

wheras moreth>n’s Keith Maxwell adds

“One of the first things we check when a claim comes in is whether there has been any fronting. It’s not a wise move.”

So what can young drivers do about bringing down the cost of car insurance. The distinguished panel share some tips:

“The quickest way to cut this is by building up a no-claims bonus [in your own name], which can ultimately reduce premiums by half to two-thirds.” Keith Maxwell (morethan)

“This is the passport to cheaper premiums. It’s best to bite the bullet and start building it up as quickly as possible,” adds Erik Nelson (NU)

Agreed. It’s worth pointing out that although you will pay more in the short term, if you steer clear of too many claims, you will save money in the long run – especially when it is time to leave the family home.

“Look at taking the Pass Plus driving course. This advanced qualification can bring discounts of 10 per cent on premiums.” Erik Nelson (NU)

“We offer a rapid bonus scheme. Basically, you insure the car in a block of nine months, at the end of which you are credited with a full year’s no-claims bonus,” Erik Nelson (NU)

What Mr Nelson doesn’t mention, is that these “Bonus Accelerator” policies, also touted by Admiral/Elephant, often have a few drawbacks. Frequently they charge you a higher monthly fee for 10 months than you would pay on a twelve monthly basis. Secondly, this undermines the basis of No Claims discount somewhat, and, as a result, some companies are reluctant to accept bonus from these accelerator policies. Companies, which have, in the past included such well known names as .. er.. Norwich Union! Quote from the thread linked above

“It seems a bit confusing as I got a quote from Norwich Union with 1 years NCB for £327 but when I spoke to them on the phone and tolod them it was a 10 month BAP, they said they didn’t recognise it and could only quote me over £500.”

Norwich Union have clearly changed their mind since then.

More Than and Norwich Union, have both run “Black Box” powered Pay as You Drive schemes, although, as Mr Nelson explains, Norwich Union have had to cancel these.

“We had hoped … that the car manufacturers would start offering the GPS boxes as standard. Ultimately, the expense meant we had to call a pause.”

Another thing we’ve been saying for a while, is that these schemes are using technology for its own sake – drivers who don’t drive as far can benefit from discounts on a limited mileage policy without having to submit to curfews or corporate snooping.

“Go for a smaller car in a low insurance group. And consider if you should go with third party, fire and theft cover rather than fully comprehensive, and whether you need the car for commuting or just leisure driving.” Keith Lewis, Zurich

This is all very sensible stuff. If your car is low value (let’s face it, most people start off with a banger) TPFT is the most sensible level of cover. We made a list of the ten cheapest cars for young drivers, but there are others that fit the common theme – low engine capacity, small cars with ready availability of cheap parts.

“Younger drivers will have an excess imposed, but by agreeing to a slightly larger one, the premiums can be cut.” Keith Maxwell (Morethan)

Very true. A voluntary excess can reduce the premium, but be careful not to raise it too high, as if you have an accident you may have to fork out the amount of your excess before you can get back on the road.

So, some good tips, and some iffy ones from the major insurers, but I have a few more young driver car insurance tips that might help out:

Join an owners club or online forum. This can bring you a discount of up to 15% on a policy, easily covering any membership fees with the insurance saving.

Take extra security precautions to reap an extra discount. So fit the best alarm you can, and try and persuade your dad to let you keep your car in the garage.

Can’t find a PassPlus near you? Well there are plenty about, but perhaps you might find a more convenient venue doing the IAM or Max Driver courses. Don’t worry – we do discounts for those as well.

Be wary of comparison sites. As you’ve seen above, some companies will try and foist a 10 month ‘accelerator’ policy. Another advantage to the companies pushing these is that it gives them an unfair advantage on aggregator sites if everyone else is offering 12 month policies – remember they are offering around 17% less cover. It is always best to include a specialist broker or two when it comes to ringing around. You will usually find that you end up paying less over the phone than you do online – despite what you might think.

The results are in in the Auto Express Driver Power insurance survey for 2008 and we were pleased to finish in a creditable 11th place in the survey, showing last year’s rise from 40th to 17th wasn’t just a flash in the pan.

With this result being the outcome of actual customers responses, we’re especially happy that our customers seem to have a good opinion of us, a testament to all the hard work which has been done in improving the customer experience over the last few years, even though we certainly think there’s room for further improvement.

I think the results are even better for the fact that, as a broker, a certain amount of the customer experience is out of our hands and relies on our panel of insurance providers. Particularly so when you consider that the unusual and specialist cars we often cover are much harder for the insurance companies to deal with, especially if there is a claim.

Because of that, I think the value of dealing through a decent broker is demonstrated when you see that some of the companies on our panel are languishing in the bottom 10 of the rankings – so it seems that you really can get demonstrably better value AND better service by going through a broker, despite what Direct Line would have you believe.

Of course, the broker you choose has a big impact – otherwise Endsleigh, Budget, the AA, Swinton and the Post Office wouldn’t be in the bottom ten.

And now, a la Jeremy Clarkson, I’ll explain why we actually did even better. The top four companies are all, in a way, cheating. I don’t mean that they aren’t doing really well for their customers, because they are. It’s just that if you aren’t an elderly trade union member living in the country, you won’t be able to get a quote with all four. SAGA and RIAS concentrate on the ‘mature’ markets, Frizzell targets only union (and similar organisation) members, and the winner, NFU, will only quote drivers with a rural postcode.

Obviously that’s fair enough, but it does give these companies an easier ride in the survey stakes, because they can tailor their products and their customer experience to their very specific niche. In our case, managing the conflicting expectations of classic car owners, high net worth individuals and modified jap import enthusiasts, for example, is much more of a challenge. Our staff have to learn about hundreds of products, and then have to deal with customers who are so dramatically diverse that they need treating in quite different ways. And it even comes down to things like the hold music – which everyone complains about, but for different and often opposite reasons.

So, all in all, an impressive showing, and for anyone who might have been disappointed by our service in the past: we’ve got much better – it’s official, and we’re aiming to improve even further, so perhaps it’s time to consider giving us another go.

The idea behind PAYD is that you install some GPS telemetry gubbins in your car, so that Norwich Union can track where you go, when you go and how you get there, and in return they charge you a variable rate per hour of between 5p a mile and £1 a mile, depending on whether you’re on a leisurely drive through the Cotswolds at noon or caning it through Brixton at midnight.

Even Norwich Union’s own marketing spiel could only come out with a statistic as underwhelming as this :

“24% of “Pay As You Drive”™ Pilot customers would have saved up to 30% compared to a standard Norwich Union Motor Insurance premium”

I’m not sure if that means that 76% were worse off, or no better off for choosing PAYD, but in any case you would expect bigger savings than this from the hot air they spouted when they launched the product.

In any case, ans as we previously pointed out, a limited mileage policy is a better, lower tech solution for most young drivers, and offers the added advantage of a set monthly bill, so no sudden stings or big fluctuations when you have to travel more than in an average month (like many students travelling long distances a couple of times per term.) What’s more, in many cases the savings with a limited mileage policy can be quite substantial, and you don’t have to worry about fitting an ugly black box to your pride and joy. (Hmm. I wonder if you have to declare a telematics unit as a modification.)

Despite Aviva’s attempt to spin this failure as a result of fears of a surveillance society, I think the real problem is that the product was quite gimmicky and did not in fact offer drivers an attractive way of using their cars, and so it was doomed to failure.

The 10,000 policyholders are now being substituted onto other policies, which means in a week or two we will be seeing uproar on the forums as someone gets stung for a massive premium increase. Oh dear.

Parent company Aviva have decided that in the interest of maintaining the same brand across the world, the Norwich Union brand has to go. They had previously said they would retain it.

Cue a massive marketing spend on the rebrand, and higher premiums to pay for it, no doubt. I can’t imagine the reasoning behind replacing a brand as strong as Norwich Union, which is almost synonymous with insurance with an unknown quantity like Aviva. Sounds like a recipe for disaster to me.

Looking back on my post a little over a year ago, its fascinating how things have changed. Back then Norwich Union were sending another 1,000 jobs out to the subcontinent. Now they’re bringing them back.

And I mentioned that we had 300 employees – we’re well past 400 now and another new crop are starting this week. All based in the UK, of course, and if you do have trouble understanding them, all you need to do is larn yarself Norfolk, bor.

“What we do as a company is see what works and see what we could do better. At the end of the day we don’t want to annoy customers, who we want it to be a good experience for. If something doesn’t work, there’s no point persevering with it.”

If you want to be sure that your home insurance to be handled by someone who isn’t confused by the massive cultural differences between home heating systems, then you could do worse than give us a call on 0800 089 0203, where all of our staff are still based in Norfolk, and know all about household insurance matters. Some of them even watch Eastenders.